Dubai gold price rises again as Middle East tensions lift global demand

Dubai: Gold buyers in Dubai faced another price increase on Friday morning, extending a steady upward trend driven by global geopolitical tensions and uncertainty around US interest rates. (Check latest UAE gold prices here, alongside prices in Saudi Arabia, Oman, Qatar, Bahrain, Kuwait, and India.)

At 9.30 am, the 24-karat rate stood at Dh602.50 per gram, up from Dh601.75 on Thursday, while the 22-karat variant rose to Dh558 from Dh557.25 a day earlier.

Global tensions drive safe-haven demand

Internationally, gold steadied near the $5,000 an ounce level after two consecutive days of gains, supported by rising geopolitical risks in the Middle East that have strengthened demand for safe-haven assets.

Market sentiment shifted after US President Donald Trump said negotiations on a nuclear agreement with Iran had a limited window, stating that only 10 to 15 days would be allowed before further action. American forces have also expanded their presence in the region in what analysts describe as the largest deployment since before the Iraq war in 2003.

Bullion rose more than 2% across the previous two sessions, reflecting investors moving toward defensive assets amid heightened uncertainty.

Interest rate outlook remains key

The trajectory of US interest rates remains another major factor shaping gold’s direction, with the metal typically benefiting when borrowing costs decline.

Recent comments from Federal Reserve Governor Stephen Miran signalled a more cautious stance on potential rate cuts this year after stronger-than-expected US economic data, which has added fresh uncertainty to the outlook.

Volatility persists despite long-term strength

The gold market has experienced sharp swings in recent weeks following a historic sell-off earlier this month that saw prices retreat rapidly from record highs above $5,595 an ounce to near $4,400 within two days.

Speculative buying earlier in the year had accelerated a multiyear rally to unsustainable levels, though structural drivers behind gold’s long-term strength remain intact, including shifting investor preference away from sovereign bonds and major currencies.

Major global banks including BNP Paribas, Deutsche Bank and Goldman Sachs expect prices to resume an upward trajectory later this year, supported by continued central bank demand.

Central banks remain active buyers as they seek protection against geopolitical and financial risks, even though elevated price volatility temporarily weighed on purchases toward the end of last year.

Supply outlook adds further support

Supply dynamics also continue to influence market expectations after Newmont, the world’s largest gold producer, said it expects to produce about 10% less gold this year due partly to planned upgrades at several mines.

Analysts say tightening supply combined with persistent geopolitical risks and monetary policy uncertainty could keep bullion supported in the near term, suggesting Dubai shoppers may continue to see elevated retail prices in the weeks ahead.

- With inputs from Bloomberg.